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KKR sucks up First Data

In a blow to the Denver economy, it
appears that an acquistion will take away yet another corporate
headquarter from the Mile High city.

First Data Corp. (NYSE: FDC) today announced that it has entered
into an agreement to be acquired by an affiliate of Kohlberg Kravis
Roberts & Co. (KKR) in a transaction with a total value of
approximately $29 billion.

The agreement was unanimously approved by
the First Data Board of Directors based upon the recommendation of
the Strategic Review Committee comprised of three independent
directors. Under the agreement, First Data shareholders will
receive $34 in cash for each share of First Data common stock they
hold, representing a premium of approximately 26% over First
Data’s closing share price of $26.90 on March 30, 2007 and a
premium of approximately 34% over the average closing share price
during the previous 30 trading days.

Chairman and Chief Executive Officer of
First Data Ric Duques said, “We are pleased to reach this
agreement with one of the world’s largest and most successful
private equity firms. We believe that current market conditions
present an exceptional opportunity to fulfill our commitment to
maximize the value of First Data by delivering an immediate cash
premium to our shareholders.”

KKR Member Scott Nuttall added, “Under the
direction of a world-class management team and with the strong
support of its committed employees, First Data is at the forefront
of the worldwide trend toward electronic payments. We believe that
through continued investments in its technology, people and
customer relationships, First Data will build on its history of
innovation and industry leadership. We look forward to working
closely with First Data’s management team and clients to grow the
franchise in the years ahead.”

Since its initial public offering in 1992,
First Data has grown from $1.2 billion in annual revenue to $10.6
billion prior to the spin-off of Western Union and $7.1 billion
post spin-off. An investment in the company’s IPO, adjusted
for the recent spin-off of Western Union, would have generated 18
percent compounded annual returns for First Data’s
shareholders versus 9 percent for the S&P 500.

First Data intends to tender for all of
its outstanding bonds in conjunction with closing.

Under the merger agreement, First Data may
solicit proposals from third parties during the next 50 days. In
accordance with the agreement, the Board of Directors of First
Data, through its Strategic Review Committee and with the
assistance of its independent advisors, intends to actively solicit
proposals during this period. First Data advises that there can be
no assurance that the solicitation of proposals will result in an
alternative transaction. First Data does not intend to disclose
developments with respect to the solicitation process unless and
until its Board of Directors has made a decision.

Completion of the transaction, which is
subject to the approval of First Data shareholders, regulatory
approvals and customary closing conditions, is expected by the end
of the third quarter of 2007. The transaction is not conditioned
upon receipt of financing by the investor group.

Morgan Stanley & Co. is serving as
sole financial advisor to First Data and Evercore Group L.L.C. is
serving as financial advisor to the Strategic Review Committee of
the First Data board of directors. Sidley Austin LLP is acting as
legal counsel to First Data. Sullivan & Cromwell LLP is acting
as legal counsel to the company’s independent directors.

About First Data

First Data Corp. (NYSE: FDC) is a leading
provider of electronic commerce and payment solutions for
businesses worldwide. Serving 4.9 million merchant locations, 1,900
card issuers and their customers, First Data powers the global
economy by making it easy, fast and secure for people and
businesses around the world to buy goods and services using
virtually any form of payment. The company’s portfolio of services
and solutions includes merchant transaction processing services;
credit, debit, private-label, gift, payroll and other prepaid card
offerings; fraud protection and authentication solutions;
electronic check acceptance services through TeleCheck; as well as
Internet commerce and mobile payment solutions. The company’s STAR
Network offers PIN-secured debit acceptance at 2 million ATM and
retail locations. For more information, visit
www.firstdata.com.

About KKR

Kohlberg Kravis Roberts & Co. (KKR) is
one of the world’s oldest and most experienced private equity
firms specializing in management buyouts. Founded in 1976, it has
offices in New York, Menlo Park, London, Paris, Hong Kong and
Tokyo. Throughout its history, KKR has brought a long-term
investment approach to its portfolio companies, focusing on working
in partnership with management teams and investing for future
competitiveness and growth. Over the past 30 years, KKR has
invested in eleven transactions in the financial services and
processing sectors, representing over $35 billion of aggregate
value. KKR has completed and announced over 150 transactions with
an aggregate value of over US$345 billion. (www.kkr.com)